Hello, can you please check and see whether I've properly done this excel template right? For part one, we had to: calculate: A.) Initial investment, B.) Operating cash inflows and incremental cash inflows, and C.) Terminal cash flow. For part two, based on the data from question #1, depict in both table and timeline format the relevant cash flow stream for Model A and Model B, assuming each is terminated at the end of year 5. For part three, calculate for the new molder alternatives each of the following decision methods: A.) Payback period, B.) NPV, and C.) IRR and for part four, recommend as well as explain which, if either, of the new molders ATI should acquire if the firm has:

a.)Unlimited funds

b.)Capital rationing

And assuming the cash inflows associated with Model A are considered significantly riskier than Model B, how does this impact your recommendation from the other question (number four).

Here is the background of this template:

Global Assembly Company (GAC) is a manufacturer and distributor of large machinery for many companies, including those in the turbine industry.

GAC's sales manager has proposed two cash purchase alternatives for ATI's consideration. Both would speed up blade molding times and reduce labor costs since fewer changeovers and maintenance would be required. Key financial data for the existing molder and the two proposed alternatives are summarized below.

Existing molder: Originally purchased 3 years ago at an installed cost of $375,000, it is being depreciated under the MACRS 5-year schedule. It has 5 more years of economic life. The molder can be sold now for $205,000 before taxes. If retained instead of being replaced, it can be sold at the end of 5 years (it's remaining economic life) to net $120,000 before taxes.

New Model A: The more advanced of the two recommended alternatives, it can be purchased for $720,000 and will require $40,000 of installation costs. The 5-year MACRS depreciation schedule will be used. At the end of 5 years, it's estimated the machine could be sold to net $210,000 before taxes. Current account changes associated with the acquisition of this molder are listed in the table below.

Cash: $28,000

Accounts receivable: $88,000

Inventory: $(17,000)

Accounts Payable: $26,000

New Model B: Purchase cost is $600,000 and installation costs are $32,000. The same 5-year MACRS depreciation schedule will be used. At the end of 5 years, the molder can be sold to net $150,000 before taxes. No effect on the firm's current accounts is expected.

Estimated earnings before depreciation and taxes for each of the three molders (Existing, A and B) over the net 5 years is shown in the table below. ATI is subject to a corporate ta rate of 21% and cost of capital of 8%.

EBDIT for ATI molders scenarios

Year Existing Molder ($) Model A ($) Model B ($)

1 160,000 260,000 225,000

2 160,000 300,000 225,000

3 160,000 310,000 225,000

4 160,000 340,000 225,000

5 160,000 360,000 225,000